 Now that we have gathered the natural gas and run it through a processing plant, we have the residue natural gas, which is approximately 98% methane. This again is what we call commercial or market grade natural gas, and it now meets the quality specifications of the transmission pipeline. Again, the overall function of the transmission pipelines is to take gas from large producing areas and get it to the market areas. Here is a simplified map of the natural gas pipeline grid throughout the United States. There is pipe literally running from the very south tip of Texas and Brownsville all the way up to New York City. That happens to be Transcontinental Natural Gas Pipeline Company, which is owned by the Williams companies out of my home city, Tulsa, Oklahoma. But you can see there are pipes traversing the United States, a very extensive grid. And if you'll notice the concentration in the Gulf Coast, there is vast amounts of supply in the Texas, Louisiana, Oklahoma, Arkansas, Mississippi and Alabama areas. So we have both offshore and onshore production. The shaded areas represent large supply basins. Here's the normal flow from large supply basins to the market areas. Your largest areas of demand in the United States include the northeast. The basically the Washington D.C. all the way up to Boston Corridor, the upper Midwest, which is going to be cities like Cleveland, Detroit, Chicago, Minneapolis, Milwaukee, the West Coast, most of the entire state of California, as well as New Mexico and Arizona along the way. Texas itself consumes a considerable amount of natural gas largely due to air conditioning loads in the hotter months, but also due to the petrochemical refining process. So that would also encompass the states of Louisiana, Mississippi and Alabama. So a considerable amount of production in that area stays at home, as we like to say. These are the all important new gas shale plays in the United States. There are various basins that you can see here. The single most important one in my opinion is the Marsalis shale in the northeast. The northeast part of the United States consumes a considerable amount of natural gas. It is the premium price market for natural gas. So now you have substantial amount of natural gas production in the largest consuming area in the premium market. It has had a profound impact on supplies in the other areas as a lot of that gas no longer goes to the northeast because it's not needed. And so the price impact of the Marsalis shale has been dramatic in just the last two years. It is one of the major causes of the lower natural gas prices that we see today. This is an indication of some of the activity and the estimated recoverable reserves over a three-year period. You can see that the Hainesville is among the largest, but the Marsalis is very significant because of the location of the potential reserves coming out of there. This map also does not show the new Utica shale formation that has occurred in Ohio and is being drilled and explored as we speak. So we talked about gathering pipe, which runs from anywhere from about two to six, even 12 inches transmission pipelines. Because their major function is to connect supply areas to market areas. And because they literally have thousands of supply sources, wellheads, pipelines, processing plants, etc. They run in a diameter more in the range of 16 inch on the low side to as much as 42 inches on the high side. The used compressors to move the gas along the range of pressure can any be anywhere from a low of 200 to as much as 1500 pounds per square inch. Natural gas flows to the point of least resistance. That is the point of consumption is going to have the lowest pressure and all the supply areas are going to have the highest pressures. Pressure is increased along the system to maintain the flow from the supply area to the market area. And again, we use large mainline compressors to accomplish that. This particular map illustrates in a very generic fashion what would be the difference between transmission lines and gathering lines. These are the assets of One Oak. You can see the spidery yellow lines represent gathering lines whereas the red lines represent a transmission system. Yellow squares show you processing plants throughout the gathering systems and the red squares represent underground natural gas storage facilities. These are pictures of actual pipeline construction. The very top left picture, they have cleared a right away. That's the total area that the pipeline would lease to dig a trench and lay its pipe in. Pipes are generally in 40 foot sections in this particular picture. It's the first stage where the pipe is actually laid in the trench. In the second picture in the center there, pipe is welded together at each end of those 40 foot sections. In this particular case, they're bringing the pipe over a hill in some rough terrain. And in the lower right picture, you can see the machinery that's actually used to lower the pipe back down into the trench once it has been welded together. And then the trenches are covered up with dirt. That becomes then the pipelines right away which they are obligated to maintain. And the pipe, maybe it must be buried at least a depth of six feet. You can see here that you finish pipeline. That's the right away cutting through the trees, the ground over. You won't see the pipe except occasionally you'll see one of these above ground valves stick up out of the ground. This is a point where the pipeline can control the flow of gas. They can allow flow through the pipeline here or they can close it off in case of an emergency or if any type of maintenance has to be done. But again, you'll see these types of right-aways. They can be looked very similar for pipelines, electrical lines, and other. But we have some terminology. We talk about the receipts into a transmission pipeline. That's just what are the sources of gas that come into the transmission pipelines themselves. We already know that we have some well heads. So single high pressure wells could be tied directly into a transmission pipeline. We also have the gathering systems. Multiple wells are brought into a common point, otherwise known as a central delivery point or CDP. The processing plants have their residue lines where the 98% methane residue gas is delivered into the transmission system. And as you saw on that simplified map of the US pipeline grid, pipelines cross one another. So when they cross one another, they have a tendency to go ahead and tie together so they can exchange gas, both the interstates and the intrastates. Interstate pipeline companies are pipes that cross just one state border. Intrastates, all of their pipe is contained within a single state. And then we have underground storage facilities. Those storage facilities, when they are withdrawing gas, are providing gas to the transmission pipeline systems. Therefore, they represent a source of supply or receipt as well. We then have the deliveries or the takeaway. These are the places that the transmission pipelines will ultimately deliver natural gas. We refer to the gas companies as local distribution companies. The point of delivery between a transmission pipeline company and an LDC we refer to as the city gate. It is dropped off at the city. There are multiple end users that are directly connected to the transmission lines. They do not receive their supply by gas company. One of the primary examples is that of power companies where power plants are tied directly to the transmission pipeline. Again, this idea that the pipelines are all connected through a grid system. One pipeline delivers gas to another pipeline. Therefore, that becomes a delivery point for the first transmission pipeline company and storage facilities. Gas that is stored underground is delivered to the storage facility by the transmission pipeline company. Pipeline systems run 24 hours a day, 365 days a year. And so they have electronic monitoring systems. The term for that is known as SCADA, which stands for supervisory control and data acquisition. All the information on the pipeline is transmitted electronically to a central monitoring and control center. They're looking at gas pressures, the amount of flows. And they can also electronically control a number of pipeline facilities. The more sophisticated SCADA systems for natural gas transmission pipeline companies can actually remotely open and control valves, start, stop compressors, open and control regulators. Regulators basically regulate the pressure at certain points in the pipeline. Here's a picture of an actual gas control center. These people are in there 24 hours a day monitoring all the activity across the pipeline system. This is an actual pipeline explosion, a pipeline mishap that occurred because pipeline pressures were not being monitored closely enough. And also because the pipeline was not being inspected on standard intervals as required by the Department of Transportation. This explosion occurred in Arizona through a recreational campground. You can see the crater that was blown out when the natural gas was ignited in the foreground is actually some molten dirt. This picture shows that there's still the natural gas in the pipeline burning out. Again, look at the very large crater that was created by the explosion of the natural gas. There's the cutaway. This is where the pipe was welded to the next section of pipe and the weld actually gave way. This is the scorched earth that was in the area around this particular explosion. This is an actual piece of the pipeline itself, the tube that we call it. Steel sheets are actually rolled into those pipe sections horizontally and then the weld is done on the circumference when the pipe sections are joined together. So this is an actual rolled piece of pipe that was part of this explosion and blew right out of the line. Here we see the lateral seam on what was the rolled pipe. Notice that there's snow in this picture where there was absolutely none in the prior pictures. Again, this is what can happen when pipelines are not properly monitored for pressure and they are not properly inspected and maintained.